The Income Tax Appellate Tribunal (ITAT), Chennai bench has held that the short payment of invoices can be treated as business loss even if the claim is not substantiated with specific invoices. The assessee, M/s. India Pistons Ltd claimed business loss in respect of the amount of price difference / discounts deducted by the Government undertakings which were written off as bad debts since they were not recoverable though they were in the nature of discounts. It was also submitted that it was normal practice of any government transport undertaking to deduct amounts from invoices as volume discounts / turnover discounts at the time of releasing the payments.
Source Taxscan
